Report Title:

County Retail Sales Tax; Levy in Lieu of Transient Accommodations Tax

Description:

Authorizes counties to establish a retail sales tax of one per cent on sales of tangible personal property. Changes the transient accommodations tax allocations to the counties and Tourism Special Fund if a county enacts a sales tax. (SD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

1554

TWENTY-SECOND LEGISLATURE, 2003

H.D. 1

STATE OF HAWAII

S.D. 2


 

A BILL FOR AN ACT

 

relating to county taxes.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§46- Retail sales tax. (a) Subject to this section, any county may exercise all functions, powers, and duties relating to a retail sales tax, and may impose a retail sales tax of one per cent.

(b) The retail sales tax shall be levied and assessed on the final consumer and collected from the final consumer for the county by the retail seller. The retail sales tax shall be levied on the final price of tangible personal property sold to a final consumer before the imposition of the general excise tax under chapter 237 on the amounts received by the retail seller. The retail sales tax collected from the final consumer by the retail seller shall not be subject to the general excise tax under chapter 237.

(c) In order to exercise the delegation relating to the retail sales tax in this section:

(1) Counties with a population of more than two hundred thousand must adopt a retail sales tax ordinance before August 1, 2003; and

(2) Counties with a population of two hundred thousand or less must adopt a retail sales tax ordinance before October 1, 2003.

Each county upon adoption of a retail sales tax shall immediately notify the department of taxation of the adoption of the tax, and the tax shall take effect on January 1, 2004.

(d) The department of taxation shall assess and collect the retail sales tax for distribution to the county imposing the tax. The department of taxation may retain five per cent of the amount assessed and collected on behalf of a county as reimbursement for the costs of the assessment and collection incurred by the State. The department of taxation may adopt rules under chapter 91 and create forms as necessary to implement this section.

(e) As used in this section, "retail sales" means the final sale of tangible personal property to a final consumer."

SECTION 2. Section 237D-5.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established in the state treasury the transient accommodations tax trust fund to be administered by the director of finance, into which shall be deposited the revenues prescribed by section 237D-6.5(b)[.] or c."

SECTION 3. Section 237D-6.5, Hawaii Revised Statutes, is amended to read as follows:

"§237D-6.5 Remittances; distribution to counties. (a) All remittances of taxes imposed under this chapter shall be made by cash, bank drafts, cashier's check, money order, or certificate of deposit to the office of the taxation district to which the return was transmitted.

(b) Revenues collected under this chapter shall be distributed as follows[:] subject to subsection (c):

(1) 17.3 per cent of the revenues collected under this chapter shall be deposited into the convention center enterprise special fund established under section 201B-8; provided that beginning January 1, 2002, if the amount of the revenue collected under this paragraph exceeds $31,000,000 in any calendar year, revenues collected in excess of $31,000,000 shall be deposited into the general fund;

(2) 32.6 per cent of the revenues collected under this chapter shall be deposited into the tourism special fund established under section 201B-11 for tourism promotion and visitor industry research; provided that beginning on July 1, 2002:

(A) If the amount of revenues deposited into the tourism special fund exceeds $62,292,000 in any fiscal year, of the first $1,000,000 in revenues deposited in excess of $62,292,000:

(i) Ninety per cent shall be deposited into the state parks special fund established in section 184-3.4; and

(ii) Ten per cent shall be transferred to the Hawaii statewide trail and access program pursuant to section 198D-2(b)(5);

provided that the total amount deposited into the state parks special fund and to the Hawaii statewide trail and access program shall not exceed $1,000,000 in any fiscal year;

(3) 44.8 per cent of the revenues collected under this chapter shall be transferred as follows: Kauai county shall receive 14.5 per cent, Hawaii county shall receive 18.6 per cent, city and county of Honolulu shall receive 44.1 per cent, and Maui county shall receive 22. 8 per cent; and

(4) 5.3 per cent of the revenues collected under this chapter shall be deposited into the transient accommodations tax trust fund established under section 237D-5.5.

All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection, and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection.

(c) If a county with a population of more than two hundred thousand imposes a retail sales tax pursuant to section 46- , revenues collected under this chapter starting on January 1, 2004, and thereafter shall be distributed as follows:

(1) 17.3 per cent of the revenues collected under this chapter shall be deposited into the convention center enterprise special fund established under section 201B-8; provided that, if the amount of the revenue collected under this paragraph exceeds $31,000,000 in any calendar year, revenues collected in excess of $31,000,000 shall be deposited into the general fund;

(2) 32.6 per cent of the revenues collected under this chapter shall be deposited into the tourism special fund established under section 201B-11 for tourism promotion and visitor industry research; provided that:

(A) If the amount of revenues deposited into the tourism special fund exceeds $62,292,000 in any fiscal year, of the first $1,000,000 in revenues deposited in excess of $62,292,000:

(i) Ninety per cent shall be deposited into the state parks special fund established in section 184-3.4; and

(ii) Ten per cent shall be transferred to the Hawaii statewide trail and access program pursuant to section 198D-2(b)(5);

provided that the total amount deposited into the state parks special fund and to the Hawaii statewide trail and access program shall not exceed $1,000,000 in any fiscal year;

(3) 44.8 per cent of the revenues collected under this chapter shall be transferred as follows:

(A) Kauai county shall receive 16.0 per cent;

(B) Hawaii county shall receive 20.0 per cent;

(C) Maui county shall receive 24.0 per cent; and

(D) The state general fund shall receive 40 per cent;

provided that if Kauai, Hawaii, or Maui county adopts a retail sales tax, the amount of revenues collected under this chapter to be distributed to those counties under this paragraph shall be reduced by one-half, the remainder of which shall go to the state general fund; and

(4) 5.3 per cent of the revenues collected under this chapter shall be deposited into the transient accommodations tax trust fund established under section 237D-5.5.

All transient accommodations taxes shall be paid into the state treasury each month within ten days after collection, and shall be kept by the state director of finance in special accounts for distribution as provided in this subsection.

[(c)] (d) On or before January or July 1 of each year or after the disposition of any tax appeal with respect to an assessment for periods after June 30, 1990, the state director of finance shall compute and pay the amount due as provided in subsection (b) or (c) to the director of finance of each county to become a general realization of the county expendable as such, except as otherwise provided by law."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2020.